China is now a critical growth and manufacturing market for
hundreds of the world's largest companies. So if this move
is widespread and sustained, it could have a big impact on the
world economy.

China's relationship with foreign companies is starting to sour,
as tougher government policies and intensifying domestic
competition combine to make one of the world's most important
markets less friendly to multinationals.

Interviews with executives, lawyers, and consultants with long
experience in China point to developments they say are making it
much harder for many foreign companies to succeed. They say the
changes suggest Beijing is reassessing China's long-standing
emphasis on opening its economy to foreign business—epitomized by
the changes it made to join the World Trade Organization in
2001—and tilting toward promoting dominant state companies.

In the latest broadside against foreign firms, authorities in a
wealthy province near Shanghai on Tuesday assailed the quality of
luxury clothing brands from the West, including Hermès, Hugo
Boss, Tommy Hilfiger, Versace and Dolce & Gabbana.